India’s fast-moving energy transition

Investments worth more than $100 billion over the past eight months are driving an unprecedented shift to renewable energy in India.

The trend is detailed in a report we just posted—India’s Electricity Sector Transformation—that charts the accelerating influx of global capital into India as the country moves toward its goal of installing 175 gigawatts of renewable energy by 2022.

Just a few months ago, global financial markets reflected investor skepticism around whether good intentions and big promises could be turned into concrete actions. The figures we see today speak for themselves, and the $100 billion in firm commitments signed and sealed include deals with state-owned enterprises, leading Indian power companies, a number of Indian billionaires new to the power sector and major global renewable-energy firms and utilities.

October 2015 alone saw more than a dozen major deals in India’s renewable-energy sector. Among them:

Sany Group, China, announcing plans to invest $3 billion by 2020;

Chint Group, China, announcing plans to invest $2 billion by 2020;

The new SoftBank/Foxconn/Bharti joint venture signing its first $2 billion memorandum of understanding in Andhra Pradesh for 3 gigawatts of renewables;

The German government pledging €1.5 billion over five years to support India’s solar energy expansion through a German-Indian solar partnership.

The November 2015 SunEdison solar auction win of 500MW at Rs4.63/kWh (US7.1c) set a record low solar price, 10% lower than the previous record low a few weeks earlier, Buckley said.

It’s all in line with Energy Minister Piyush Goyal’s repeated assertion that India’s reliance on thermal coal imports is not sustainable.

The consequences for imported thermal coal are stark, and what’s occurring in India today reinforces the fact that the seaborne thermal coal market is in structural decline. There is quite simply no rational economic case for imported coal in India, and the speed of renewable energy developments is now undercutting even domestic fossil fuels.